DLLR News

Homeowners can avoid scam artists by verifying a contractor's licensing status, working
with insurance company

BALTIMORE (2/12/10) - Department of Labor, Licensing and Regulation (DLLR) Secretary Alexander M. Sanchez
reminds homeowners who may have sustained roof or other structural damage from heavy snowfalls to check a
contractor's licensing status and avoid being scammed by unlicensed contractors operating illegally.

"Scam artists abound in the home improvement industry, and too often they seek to prey upon unsuspecting
homeowners who are desperate to repair damage after storms," Secretary Sanchez said. "Homeowners should be wary of
unlicensed contractors, particularly those who want large upfront payments or offer amazingly low prices."

Homeowners who use Maryland Home Improvement Commission (MHIC) licensed contractors are protected by the Home
Improvement Law, and are eligible for coverage by the Home Improvement Guaranty Fund. The Guaranty Fund provides
homeowners with up to $20,000 dollars for losses caused by poor or incomplete work by MHIC licensed contractors.
However, if a homeowner hires an unlicensed contractor, they are not eligible for payment from the guaranty fund,
and their only recourse is through the courts.

The Maryland Insurance Administration (MIA) advises homeowners to make only the temporary repairs necessary to
prevent further damage, such as covering a leaking roof with waterproof material, until permanent repairs are
authorized by their insurance company. The MIA cautions that unauthorized repairs may not be reimbursed.

"We encounter far too many homeowners who have been the victims of unscrupulous individuals who take a
homeowner's money and walk away without ever completing the work for which they've been paid," said Stanley Botts,
Commissioner of Occupational and Professional Licensing, a division of DLLR. "Homeowners can protect themselves
easily by hiring a licensed contractor."

Each year, MHIC investigates approximately 3,000 complaints against licensed and unlicensed contractors. In the
last fiscal year, MHIC helped recover close to $ 1.5 million for homeowners who were cheated by unlicensed
contractors. Acting as a contractor, subcontractor, or selling a home improvement without a license is a
misdemeanor and, upon conviction, is subject to a fine up to $1,000 or imprisonment up to 30 days, or both. Each
subsequent conviction is subject to a fine up to $5,000 or imprisonment up to 2 years, or both.

Consumers can check a contractor's license status and, and access other information and services from Maryland
Home Improvement Commission, by calling 888-218-5925. Licensing information may be found online by visiting
the MHIC home page and then clicking on "License Search."